Stocks To Potentially Go Down Another 1.5 Percent

This has been a market climbing a wall of worry for the past 3 weeks. Companies that missed on revenues and beat on earnings have been handsomely rewarded for the past 3 weeks. It appears the pendulum has now gone the other way. As the markets climbed the wall of worry all the way up to resistance of 13,330 on the Dow Jones Industrial Average(NYSEARCA:DIA) and 1,426 on the S&P 500 (NYSEARCA:SPY), stocks with similar quarterly reports of lighter than expected revenues and better than expected earnings are now getting crushed.

Gold(NYSEARCA:GLD) and Silver(NYSEARCA:SLV) have also recently broken out to new highs. Volatility is finally coming back in to the market as we've now had our second 110+ point trading range on the DJIA and the VIX is now firmly over 15. As of the close of today's trading, the S&P has now pulled back approximately 1.7% from the recent market highs but is still up approximately 9.5% since July 1st. I personally am looking for approximately another 1.5% downside in the market. I believe fund managers will then step in fiercely to defend their potential 8% return for this current quarter ending in September.

I am personally shorting individual stocks at this time with put options. I will remain short until the S&P 500 reaches my estimate of 1386.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: For a list of shorts that I currently have positions in, please visit my free personal blog at www.stocktradingidea.com